You purchased a stock at the end of the prior year at a


You purchased a stock at the end of the prior year at a price of $88. At the end of this year the stock pays a dividend of $2.50 and you sell the stock for $94. What is your return for the year? Now suppose that dividends are taxed at 15 percent and long-term capital gains (over 11 months) are taxed at 30 percent. What is your aftertax return for the year?

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Financial Management: You purchased a stock at the end of the prior year at a
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